Investing.com -- U.S. crude futures fluctuated wildly on Thursday, falling off fresh six-month highs, as investors digested reports of a sizable build at the Cushing Oil Hub along with strong indications of a tightening in the massive gulf between global supply and demand.
On the New York Mercantile Exchange, WTI crude for June delivery traded in a broad range between $45.63 and $47.02 a barrel before settling at $46.62, up 0.39 or 0.84% on the session. At session-highs, U.S. crude futures briefly eclipsed $47 a barrel, trading above the threshold for the first time since November 4. Since falling to 13-year lows at $26.05 a barrel on Feb. 11, WTI crude has surged by more than 65%.
On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $46.80 and $48.18, before closing at $47.95, up 0.35 or 0.74% on the day. On April 29, North Sea brent futures reached an intraday high of $48.50 to hit its highest level of the calendar year. Brent futures last touched $50 a barrel in early-October.
The front month contract for WTI crude rose to fresh 2016-yearly highs on Thursday, following a bullish report from the influential International Energy Agency (IEA). In its May Oil Market Report, the IEA said world output rose by 50,000 barrels per day on an annual basis last month, sharply below a yearly gain of 3.5 million bpd in April, 2015. At the same time, the IEA upwardly revised global demand growth for the first quarter of 2016 to 1.4 million bpd, amid strong gains in India, China and surprisingly in Russia. The IEA believes the strong gains help offset a modest increase in global oil supply by 250,000 bpd to 96.2 million bpd in April. The mild uptick transpired despite a deepening decline in output among Non-OPEC producers.
"Stock builds are beginning to slow in the OECD: in the first quarter they grew at their slowest rate since the last quarter of 2014 and February saw the first draw in a year," the IEA said in the report. "In March, OECD commercial inventories fell by a slim 1.1 million barrels, with preliminary data for April suggesting that stocks rebounded while oil held in floating storage rose.
Oil prices, though, fell off session-highs after market intelligence firm Genscape reported a build of approximately 549,000 at the Cushing Oil Hub in Oklahoma for the weekly period through May 10. Cushing, the main delivery point for NYMEX oil, is the largest storage facility in the U.S. The inventory build continued to move higher at Cushing in spite of the closure of several major pipelines last week due to the effects of the devastating wildfires in Western Canada.
On Thursday, employees at Suncor Energy, Inc., one of the largest oil sands nationwide, began returning to work, union sources told Reuters. The workers' return following a several-day absence provides indications that production in Alberta could be on the verge of resuming its normal cycle. Last week, a host of oil companies throughout the region were forced to cease operations, sending more than 1 million barrels of oil offline.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, jumped more than 0.25% to an intraday-high of 94.16. The index is still down more than 4% since early-December.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.